Customer education, infrastructure modernization and the use of data analytics will be key tools to overcoming the water industry’s perennial challenges posed by aging infrastructure, according to the Black & Veatch 2017 Strategic Directions: Water Industry Report.

The report by the global infrastructure firm says a combination of investment and new business process approaches will also be critical to closing the gap between costs and consumer expectation.

According to Ralph Eberts, Executive Managing Director for Black & Veatch management consulting, proactive, two-way engagement and deliberate focus on the customer experience can change cost and water quality perceptions and help secure the rate increases needed to upgrade aging infrastructure.

Maintaining or expanding asset life was named the most significant sustainability issue for water utilities. Survey respondents, however, are showing significant interest in uniting data from once-siloed systems to increase operational efficiencies and inform smarter asset management.

The report also examines other issues key to the industry, such as physical security and cybersecurity, trends in enterprise asset management and financing strategies.

The report finds that financial challenges associated with sustainable systems have shifted, with fewer providers selecting finance-driven topics as their top issues on the path to sustainability.

Cindy Wallis-Lage, President of Black & Veatch’s water business commented:

“Sustainability has different meanings to different segments of the industry. We pursue sustainable water supplies that can serve residents for decades to come. We look for ways to become more economically sustainable by balancing system and user needs with available capital. At the same time, we pursue a kind of social sustainability by engaging consumers as full partners in the pursuit of a supply that’s safe and resilient against weather events and long-term climate change.”

“Sustainable and resilient systems will depend on industry leaders who can both collaborate and innovate as the water sector attempts to modernize its assets, optimize existing resources and convince customers that upgrades are important.”

Key findings include:

• Nearly half of survey respondents (47 percent) indicated that key stakeholders and the public understand the need for proposed rate increases, but still want water providers to “do more with less.”
• Despite increased public scrutiny, when asked about lead and copper corrosion, 55 percent of water utilities indicated it has not been an issue in their distribution systems.
• The report survey found that integrated planning trends higher among larger communities; the larger the population, the greater the rate of adoption. Of the respondents who already use the approach, 49 percent are from communities of 2 million people or more, and the acceptance rate drops as the community shrinks in size.
• More than 30 percent of utilities have indicated plans to implement advanced operational technologies such as advanced metering infrastructure and enterprise asset management.
• Nearly 40 percent of respondents said data analytics figured into their processes but not operationally; another 20 percent said data analytics weren’t part of their current processes but figured into strategic planning.
• Water providers are increasingly focused on sustainability and integrated planning to help solve the years-long conflicts between aging infrastructure and a safe, resilient water supply.

Data analytics can address many of the problems 

The report also explores how data analytics, consumer education n infrastructure modernization and a more comprehensive view of sustainability are helping water utilities gain ground and analyzes how political leadership and collaboration can overcome concerns about costs and customer demand.

Commenting on data analytics, Mike Orth, Executive Managing Director for the Americas in Black & Veatch’s water business said:

“Data analytics provide new levels of system intelligence that can address many of the problems hampering sustainable water supplies. Smart meters and new software-based management tools enable us to turn all that data into understandable, useful insights that can address everything from water safety, asset performance and leak detection, to integrated planning and energy efficiency.”

Cyber security a key issue

The report also examines other issues key to the industry, such as physical security and cybersecurity, trends in enterprise asset management and financing strategies.

On security, the report says that the proliferation of smart devices on systems has created “untold new channels for hackers to disable critical infrastructure.” Roughly a quarter of survey respondents said they had conducted an environmental, physical or cybersecurity attack simulation. However, nearly 70 percent of those were so-called “tabletop” exercises that may not thoroughly simulate prospective threats.

While digital technologies are helping utilities to monitor more equipment and processes to deliver new efficiencies, they also offer more potential vectors for hackers that can lead to disabling critical infrastructure.

In the US, 57% of respondents are spending less than $1 million annually on physical security for water treatment plants and large remote facilities, while 59% are spending less than $1 million per year on cybersecurity for IT. However, more than a third are spending up to $5 million a year to shore up their security efforts in these two critical areas

Click here to access 2017 Strategic Directions: Water Industry Report

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